Thursday, May 3, 2018

A time-honoured tradition of Wall Street is the rather drab quarterly earnings call between executives. Questions are often telegraphed, and therefore blunted, and participating analysts tend to be hand-picked by management.

A good example is Netflix, which last quarter took the liberty of hosting a pre-recorded conference call with one analyst. The format improves audio-video quality, according to spox at the streaming platform; quelling dissent is an unintended consequence.

Following Tesla's unusual call yesterday, we thought it would be fun to open the history books to some colourful instances where sonorous corporate speak reveals a little bit more than intended.

Tesla Q1 2018 - “These questions are so dry. They're killing me”
A small earnings beat, Model 3 production rate increasing and higher gross margins — all in all, it seemed like a pretty good quarter for Tesla. That was until Bernstein Research analyst Toni Sacconaghi took the dais. After fielding two short questions on Tesla's lower projected capital spending, he asked how it would effect the Model 3 ramp up.

Excuse me. Next. Boring bonehead questions are not cool. Next?
The operator quickly scrambled to the next analyst, Joseph Spak of RBC Capital Markets. On cue, he began to ask about how many Model 3 reservations had begun the sales conversion process. Mr Musk, clearly exasperated by financial questions on a financial-specific phone call with financial analysts, cut in again:

We're going to go to YouTube. Sorry. These questions are so dry. They're killing me.
By YouTube, Mr Musk meant Galileo Russell, a finance-graduate who hosts the “Hyperchange TV” YouTube channel. Mr Russell had been invited on the call after lobbying Musk on Twitter.

The stock responded accordingly, dropping 5 per cent from its pre-conference level. At a guess, perhaps some investors were expecting serious answers to questions about a critical time for Tesla? At least we found out synergies between Space X and Tesla are still three years from being realised.

Lehman Brothers Q1 2008 - “Confidence in the underlying enterprise of the business”...